China’s Pandemic Export Boom Pushes Surplus To Record
Headlines will doubtlessly (and rightfully) tout China's record exports in 2021, but if you're looking to get a read on the near-term outlook for the world's second largest economy, the more important figure released on Friday may have been a large downside miss on December imports.
China said shipments rose nearly 30% last year to a record $3.36 trillion, while imports jumped to $2.69 trillion, leaving a record surplus.
Trade has been a bright spot for China at a time when the economy is faci
“But imports rose just 19.5%, missing consensus by two standard deviations…” How meaningful is it to say it missed it by two standard deviations? The fact that imports rose by 19.5% YoY for the second largest economy is just a mind blowing number.
It’s extremely meaningful. Consensus wanted +27.8%. But more to the point, it’s very important in the current context. I guarantee you that every Street analyst who covers China mentions weakness in December’s imports in their coverage of this data. It’s not a “mind blowing number.” That was a very weak number. You have to put it in the context of the lackluster recovery in domestic demand, “zero COVID” policy and, particularly, the generally sluggish nature of retail sales growth during the recovery.
Lower than expected imports often denote an economy that is has below expected consumer spending.